We published last week a new Spend Matters briefing paper, titled Building Supplier Involvement in Public Procurement. It is sponsored by Vortal, the leading public sector focused eProcurement solution provider. But like everything we publish, it is written from an independent and unbiased perspective – and you can download it here, free on registration.
In many contracting authorities across the European public sector, eProcurement is already widely used, whilst in others it is still in a development phase. Different countries and Authorities are also taking different approaches to how the technology is developed and implemented – see our previous paper, Implementing the eProcurement Mandate – Technology Choices and Key Decision Factors for further details on some of the key issues to be considered.
But with all authorities now needing to adopt eProcurement to satisfy EU regulations, it is vital that they think about how the market perceives their processes and systems as well as how they work from an internal perspective. It is also important, we believe, that buyers act in a proactive manner to develop a strong and dynamic supplier base.
Too many authorities simply launch a tender onto the market and simply hope that someone will reply! In the new paper, we use the analogy of fishing. That approach would mean just dropping your net or line into the water and hoping that something swims into it. But there is an alternative. You could take active steps to develop your own healthy stocks of fish – fish farming, if you like. That would mean you know you have a “market” that can satisfy your needs; you are not relying on luck.
Now the analogy with suppliers is not perfect, but you get the picture. And the best procurement organisations, in the public and private sector, use both techniques. They “fish” to find new providers, they will move into new waters to look for alternative suppliers; but they will also work to develop their own community of trusted and proven suppliers who they know and who are likely to compete regularly and actively for their business.
So systems and technology that can support the development of a community and also of course enable the authority to run open and competitive procurement processes are what we should be looking for, we argue.
Here is a short extract from the new paper, as we go into the fishing analogy.
In the private sector, the best procurement organisations tend to use a combination of the two. They do not disregard the open fishing idea, keeping themselves open to new firms coming into their pool of effective suppliers. But they are also careful to nurture their best suppliers, develop them and help them grow. In the public sector, the focus has generally been much more on the trawling concept. Every tender starts from scratch, with a clean slate and an approach to the market to try and find the “best” supplier or suppliers. Even in the case of frameworks, in our experience there is little focus on developing the different suppliers who are included on the framework, and mini-competitions go back to the principles of the open fishing.
Now clearly, we cannot move away from the fundamental principles of open competition that are an essential part of the EU treaty principles. But there is more we can and should do to develop our community of suppliers, make life easier for them, and help them become ultimately better suppliers to our own benefit. This means procurement people taking a more proactive approach to developing and working with organisations to help them become better potential suppliers.
Follow the link to download the whole paper – Building Supplier Involvement in Public Procurement now.